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Rising Gas Prices Eat Into the Tax Cuts

Eric Gaillard

By The Fiscal Times Staff

May 14, 2018

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The monthly retail sales report due Tuesday morning should shed some light on the tug of war consumers are facing between the bump in take-home pay from the tax cuts and increasing toll they face at the gas pump. Average gas prices have been rising, up six cents to $2.87 a gallon in just a week, and up more than 50 cents in the last year, according to AAA.

The Wall Street Journal reported that the increased cost of gas could claim a big percentage of the tax cuts for millions of workers:

“Morgan Stanley estimates that if gas averages $2.96 this year, it would take an annualized $38 billion from spending elsewhere, an upward revision from the bank’s $20 billion estimate in January. That would wipe out about a third of the additional take-home pay coming from tax cuts this year.”